Wage subsidy subsidises labour brokers:
Ban labour brokers!
Review the Employment Tax Incentive!
Tuesday, 29 July 2014
The SACP is appalled by the subsidisation of labour brokers through the Employment Tax Incentive scheme. The Party reiterates its call, for labour brokers to be banned once and for all. Further, employment and industrial incentives must only be instituted and maintained when they are clearly producing the results for which they are intended, without disadvantaging or displacing any group of workers from employment.
We cannot continue to pump tax payers' money into schemes designed in the name of job creation, while in fact what we are doing is only donating the money to those who are already wealthy. The SACP therefore calls for a review of the Employment Tax Incentive scheme with immediate effect, and for greater emphasis and focus to be placed on a vibrant industrial policy to expand and diversify production, and thereby create jobs on a sustainable basis.
The Communist Party, however, has no illusions about the capitalist class as a whole, which, as Karl Marx elucidates inCapital, is like a vampire that lives by sucking workers' labour. The capitalist class lives more, the more labour it sucks. It will not let loose its hold, so long as there is a muscle, a nerve and a drop of blood to be exploited. Nonetheless, industrial capitalists differ from labour brokers in that, historically, they developed from playing a certain role in the organisation of production and development of productive forces. In sharp contrast, labour brokers are the purest vampires.
As we have repeatedly made clear, labour brokers play no part in production. They are parasites on our economy and workers. They are intermediaries based on jobs that exist already, and which have nothing to do with them. They merely move workers between those jobs and unemployment. Labour brokers are a typical instrument of a merciless neoliberal policy to make it easy to fire workers, who are already outsourced, and thereby force them to swell the ranks of the unemployed.
This is done ruthlessly, without in most cases following any fair labour practices. Primarily, labour brokers do not create jobs or expand productive work - and they are not real employers. It is therefore totally unacceptable that they are receiving tax payers' money - as ABSOLUTE PROFIT - for doing nothing developmentally whatsoever.
The article ‘A labour broker subsidy?' in City Press, ‘Business' (Sunday, 27 July 2014, p.11) by Dewald van Rensburg, has this to say:
"Labour brokers are absorbing the controversial employment tax incentive (ETI) to boost their profits - without actually subsiding wages in the labour market...
Since it is the clients who are supposed to be stimulated into hiring more people for less money this potentially undermines the scheme, turning it into free money for labour intermediaries.
The major JSE-listed labour broker and recruitment agency, Adcorp, said there was nothing dodgy about it.
The company released its annual report this month which covers the first two months of the ETI - January and February. In this two months alone, Adcorphad already made R7 million from the scheme, which it accounted for as part of ‘other income'."
Roughly annualised, this would amount to R42 million a year for this labour broker alone, Adcorp.
What about the many other labour brokers who are making ABSOLUTE PROFIT from the scheme?
According to Adcorp spokesperson whose speaks Mandy Jones, as quoted by the City Press, the incentive "probably isn't sustainable" and "will be consumed very quickly".
Statement issued by the SACP Central Committee, July 29 2014
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